Sanderling Management v. Snap Inc. No. 21-2173 (Fed. Cir. Apr. 12, 2023) Alice – 35 U.S.C. § 101 | Sheppard Mullin Richter & Hampton LLP
Topic
This case addresses patent eligibility under Alice and whether the district court should have afforded the patent owner leave to amend its complaint.
Background
Sanderling asserted three patents sharing a common specification against Snap in the Northern District of Illinois. The claims are directed to a method of determining a user’s location with a GPS and displaying images the user based on their location.
Snap moved to transfer venues and to dismiss asserting the patents were invalid for being directed to a patent-ineligible abstract idea under Alice. Sanderling opposed Snap’s motions.
Before deciding Snap’s motion to dismiss, the Northern District of Illinois court granted Snap’s motion to transfer the case to the Central District of California. The Central District of California court then granted Snap’s motion to dismiss with prejudice and denied Sanderling’s request for leave to amend its complaint, which Sanderling did not make until the hearing. The district court further denied Sanderling’s motion for reconsideration.
Issue(s)
Whether the district court oversimplified the claims under step one of the Alice tests.
Whether the district court erred by not construing claim terms.
Whether Sanderling’s alleged factual disputes precluded ruling on the motion to dismiss.
Whether the district court deprived the patents of their statutory presumption of validity and improperly put the burden of proof on the patentee by deciding contrary to the prosecution history where the PTO had determined the presence of an inventive concept.
Whether Sanderling’s proposed amendments to its complaint were futile.
Holding(s)
The district court’s formulation of the abstract idea (“‘of providing information – in
this case, a processing function – based on meeting a condition,’ e.g., matching a GPS location indication with a geographic location.”) was correct.
When proposed constructions have not been provided, the court need not engage in claim construction before resolving a § 101 motion, if the claims are directed to ineligible (or eligible) subject matter under all plausible constructions.
A patentee’s conclusory and generalized allegations of factual disputes do not support denial of a motion to dismiss.
Improving scalability and speed does not provide innovative concept to an abstract idea.
Denial of reconsideration was proper because the proposed amendment to the complaint was futile.
Reasoning
The claims are directed to the use of computers as a tool; here, a tool to identify when a condition is met and then to distribute information based on satisfaction of that condition. The challenged claims here are distinguishable from McRO v. Bandai because they claim a much more generic set of steps than McRO’s specific claim language. Here, the claims have a “distribution rule” that merely receives, matches, and then distributes the corresponding function based on the user’s location.
Sanderling identified terms for claim construction, but failed to provide constructions. To determine whether claim construction is required to resolve a motion to dismiss, the patentee should propose specific constructions and articulate how adoption of the constructions would materially impact the analysis at step one (and/or at step two). Sanderling failed to do so.
A district court has the discretion to require an opposing party to identify, and articulate the significance of, specific factual disputes that purportedly make granting the motion improper. Sanderling failed to timely identify any specific factual disputes.
“No amendment to a complaint can alter what a patent itself states.” Thus, the proposed amendments to add conclusory statements that steps were not well-known, routine, and conventional to the complaint were futile. District courts need not credit conclusory allegations. Courts are not required to defer to the Patent Office determinations as to eligibility, because review under ¶ 101 is de novo.
